Beacon Lights of History, Volume 12: American Leaders

While Jackson, then, on the whole, left tariffs to Congress, he was not so discreet in matters of finance. His war with the United States Bank was an important episode in his life, and the chief cause of the enmity with which the moneyed and conservative classes pursued him to the end of his days. Had he let the Bank alone he would have been freed from most of the vexations and turmoils which marked his administration. He would have left a brighter name. He would not have given occasion for those assaults which met him on every hand, and which history justifies. He might even have been forgiven for his spoils system and unprecedented removals from office. In attacking the Bank he laid a profane touch upon a sacred ark and handled untempered mortar. He stopped the balance-wheel which regulated the finances of the country, and introduced no end of commercial disorders, ending in dire disasters. Like the tariff, finances were a question with which he was not competent to deal. His fault was something more than the veto on the recharter of the Bank by Congress, which he had a constitutional right to make; it was a vindictive assault on an important institution before its charter had expired, even in his first message to Congress. In this warfare we see unscrupulous violence,–prompted, not alone by his firm hostility to everything which looked like a monopoly and a moneyed power, but by the influence of advisers who hated everything like inequality of position, especially when not usable for their own purposes. They stimulated his jealousy and resentments. They played on his passions and prejudices. They flattered him as if he were the monarch of the universe, incapable of a wrong judgment.

Hostility to the money-power, however, is older than the public life of Jackson. It existed among the American democracy as early as the time of Alexander Hamilton. When he founded the first Bank of the United States he met with great opposition from the followers of Jefferson, who were jealous of the power it was supposed to wield in politics. When in 1810 the question came up of renewing the charter of the first United States Bank, the Democratic-Republicans were bitter in their opposition; and so effective was the outcry that the bank went into liquidation, its place being taken by local banks. These issued notes so extravagantly that the currency of the country, as stated by Professor Sumner, was depreciated twenty-five per cent. So great was the universal financial distress which followed the unsound system of banking operations that in 1816 a new bank was chartered, on the principles which Hamilton had laid down.

This Bank was to run for twenty years, and its capital was thirty-five millions of dollars, seven of which were taken by the United States; many of its stockholders were widows, charitable institutions, and people of small means. Its directors were chosen by the stockholders with the exception of five appointed by the President of the United States and confirmed by the Senate. The public money was deposited in this Bank; it could be removed by the Secretary of the Treasury, but by him only on giving his reasons to Congress. The Bank was located in Philadelphia, then the money-centre of the country, but it had twenty-five branches in different cities, from Portsmouth, N.H., to New Orleans. The main institution could issue notes, not under five dollars, but the branches could not. Langdon Cleves, of South Carolina, was the first president, succeeded in 1823 by Nicholas Biddle, of Philadelphia,–a man of society, of culture, and of leisure,–a young man of thirty-seven, who could talk and write, perhaps, better than he could manage a great business.

The affairs of the Bank went on smoothly for ten or twelve years, and the financial condition of the country was never better than when controlled by this great central institution. Nicholas Biddle of course was magnified into a great financier of uncommon genius,–the first business man in the whole country, a great financial autocrat, the idol of Philadelphia. But he was hated by Democratic politicians as a man who was intrusted with too much power, which might be perverted to political purposes, and which they asserted was used to help his aristocratic friends in difficulty. Moreover, they looked with envy on the many positions its offices afforded, which, as it was a "government institution," they thought should be controlled by the governing party.

Among Biddle's especial enemies were the members of the "Kitchen Cabinet," who with sycophantic adroitness used Jackson as a tool.

Isaac Hill, of New Hampshire, was one of the most envenomed of these politicians, who hated not only Biddle but those who adhered to the old Federalist party, and rich men generally. He had sufficient plausibility and influence to enlist Levi Woodbury, Senator from New Hampshire, to forward his schemes.

In consequence, Woodbury, on June 27, 1829, wrote to Ingham, Secretary of the Treasury, making complaints against the president of the branch bank in Portsmouth for roughness of manner, partiality in loans, and severity in collections. The accused official was no less a man than Jeremiah Mason, probably the greatest lawyer in New England, if not of the whole country, the peer as well as the friend of Webster. Ingham sent Woodbury's letter to Biddle, intimating that it was political partiality that was complained of. Then ensued a correspondence between Biddle and Ingham,–the former defending Mason and claiming complete independence for the Bank as to its management, so long as it could not be shown to be involved in political movements; and the latter accusing, threatening to remove deposits, attempting to take away the pension agency from the Portsmouth branch, et cetera. It was a stormy summer for the Bank.

Thus things stood until November, when a letter appeared in the New York "Courier and Inquirer," stating that President Jackson, in his forthcoming first annual message to Congress, would come out strongly against the Bank itself. And sure enough, the President, in his message, astonished the whole country by a paragraph attacking the Bank, and opposing its recharter. The part of the message about the Bank was referred to both Houses of Congress. The committees reported in favor of the Bank, as nothing could be said against its management. Again, in the message of the President in 1830, he attacked the Bank, and Benton, one of the chief supporters of Jackson in spite of their early duel, declared in the Senate that the charter of the Bank ought not to be renewed. Here the matter dropped for a while, as Jackson and his friends were engrossed in electioneering schemes for the next presidential contest, and the troubles of the cabinet on account of the Eaton scandal had to be attended to. As already noted, they ended in its dissolution, followed by a new and stronger cabinet, in which Ingham was succeeded as Secretary of the Treasury by Louis McLane.

It was not till 1832,–the great session of Jackson's administrations,–that the contest was taken up again. The Bank aimed to have its charter renewed, although that would not expire for five years yet; and as the Senate was partly hostile to the President, it seemed a propitious time for the effort. Jackson, on the other hand, fearing that the Bank would succeed in getting its charter renewed with a friendly Congress, redoubled his energies to defeat it. The more hostile the President showed himself, the more eager were the friends of the Bank for immediate action. It was, with them, now or never. If the matter were delayed, and Jackson were re-elected, it would be impossible to secure a renewal of the charter, while it was hoped that Jackson would not dare to veto the charter on the eve of a presidential election, and thus lose, perhaps, the vote of the great State of Pennsylvania. So it was resolved by the friends of the Bank to press the measure.

Five months were consumed in the discussion of this important matter, in which the leading members of the Senate, except Benton, supported the Bank. The bill to renew the charter passed the Senate on the 11th of June, by a vote of twenty-eight to twenty, and the House on the 3d of July by a majority of thirty-three. It was immediately vetoed by the President, on the ground that the Bank was an odious monopoly, with nearly a third of its stock held by foreigners, and not only odious, but dangerous as a money-power to bribe Congress and influence elections. The message accompanying the veto was able, and was supposed to be written by Edward Livingston or Amos Kendall. Biddle remained calm and confident. Like Clay, he never dreamed that Jackson would dare to persist in a hostility against the enlightened public sentiment of the country. But Jackson was the idol of the Democracy, who would support all his measures and condone all his faults, and the Democracy ruled,–as it always will rule, except in great public dangers, when power naturally falls into the hands of men of genius, honesty, and experience, almost independently of their political associations.

The veto aroused a thunder of debate, Webster and Clay leading the assault upon it, and Benton, with other Jacksonians, defending it. The attempt to pass the re-charter bill over the veto failed of the necessary two-thirds majority, and the President was triumphant.

Jackson had no idea of yielding his opinions or his will to anybody, least of all to his political enemies. The war with the Bank must go on; but its charter had three or four years still to run. All he could do legally was to cripple it by removing the deposits. His animosity, inflamed by the denunciations of Benton, Kendall, Blair, Hill, and others, became ungovernable.

McLane was now succeeded in the Treasury department by Mr. Duane of Philadelphia, the firmest and most incorruptible of men, for whom the President felt the greatest respect, but whom he expected to bend to his purposes as he had Ingham. Only the Secretary of the Treasury could remove the deposits, and this Mr. Duane unexpectedly but persistently refused to do. Jackson brought to bear upon him all his powers of persuasion and friendship; Duane still stood firm. Then the President resorted to threats, all to no purpose; at length Duane was dismissed from his office, and Roger B. Taney became Secretary of the Treasury, 23d of September, 1833. Three days afterwards, Taney directed collectors to deposit the public money in certain banks which he designated. It seems singular that the man who two years later was appointed Chief Justice of the Supreme Court, and who discharged the duties of that office so ably and uprightly, should so readily have complied with the President's desire; but this must be accounted for by the facts that in regard to the Bank Taney's views were in harmony with those of Jackson, and that the removal of the deposits, however arbitrary, was not unconstitutional.

The removal of more than nine millions from the Bank within the period of nine months caused it necessarily to curtail its discounts, and a financial panic was the result, which again led to acrimonious debates in Congress, in which Clay took the lead. His opposition exasperated the President in the highest degree. Calhoun equalled Clay in the vehemence of his denunciation, for his hatred of Jackson was greater than his hostility to moneyed corporations. Webster was less irritating, but equally strong in his disapproval. Jackson, in his message of December, 1833, reiterated his charge against the Bank as "a permanent electioneering engine," attempting "to control public opinion through the distresses of some, and the fears of others." The Senate passed resolutions denouncing the high-handed measures of the government, which, however, were afterwards expunged when the Senate had become Democratic. One of the most eloquent passages that Clay ever uttered was his famous apostrophe to Vice President Van Buren when presiding over the Senate, in reference to the financial distress which existed throughout the country, and which, of course, he traced to the removal of the deposits. Deputations of great respectability poured in upon the President from every quarter to induce him to change his policy,–all of which he summarily and rudely dismissed. All that these deputations could get out of him was, "Go to Nicholas Biddle; he has all the money." In 1834, during the second term of Jackson's office, there were committees sent to investigate the affairs of the Bank, who were very cavalierly treated by Biddle, so that their mission failed, amid much derision. He was not dethroned from his financial power until the United States Bank of Pennsylvania–the style under which the United States Bank accepted a State charter in 1836, when its original national charter expired–succumbed to the general crash in 1837.

It is now generally admitted that Jackson's war on the Bank was violent and reckless, although it would be difficult to point out wherein his hostility exceeded constitutional limits. The consequences were most disastrous to the immediate interests of the country, but probably not to its ultimate interests. The substitution of "pet banks" for government deposits led to a great inflation of paper money, followed by a general mania for speculation. When the bubble burst these banks were unable to redeem their notes in gold and silver, and suspended their payments. Then the stringency of the money market equalled the previous inflation. In consequence there were innumerable failures and everything fell in value,–lands, houses, and goods. Such was the general depression and scarcity of money that in many States it was difficult to raise money even to pay necessary taxes. I have somewhere read that in one of the Western States the sheriffs sold at auction a good four-horse wagon for five dollars and fifty cents, two horses for four dollars, and two cows for two dollars. The Western farmers were driven to despair. Such was the general depression that President Van Buren was compelled in 1837 to call an extra session of Congress; nor were the difficulties removed until the celebrated Bankrupt Law was passed in 1840, chiefly through the efforts of Daniel Webster, which virtually wiped out all debts of those who chose to avail themselves of the privilege. What a contrast was the financial state of the country at that time, to what it was when Jackson entered upon his administration!

It is not just to attribute all the commercial disasters which followed the winding up of the old United States Bank to General Jackson, and to the financial schemes of Van Buren. It was the spirit of speculation, fostered by the inflation of paper money by irresponsible banks when the great balance-wheel was stopped, which was the direct cause. The indirect causes of commercial disaster, however, may be attributed to Jackson's war on the Bank. The long fight in Congress to secure a recharter of the Bank, though unsuccessful, was dignified and statesmanlike; but the ungoverned passions displayed by the removal of deposits resulted in nothing, and could have resulted in nothing of advantage to any theory of the Bank's management; and it would be difficult to say who were most to blame for the foolish and undignified crimination and recrimination which followed,–the President, or the hostile Senate. It was, at any rate, a fight in which Jackson won, but which, from the animosities it kindled, brought down his gray hairs in sorrow to the grave. It gave him a doubtful place in the history of the nation.

If Jackson's hostility to the United States Bank was inexpedient and violent, and resulted in financial disasters, his vigorous efforts to put down Nullification were patriotic, and called forth the approval and gratitude of the nation. This was a real service of immense value, and it is probable that no other public man then on the stage could have done this important work so well. Like all Jackson's measures, it was summary and decided.

Nullification grew out of the tariffs which Congress had imposed. The South wanted no protective duties at all; indeed, it wanted absolute free trade, so that planters might obtain the articles which they needed at the smallest possible cost, and sell as much cotton and tobacco as they could with the least delay and embarrassment. Professor Sumner argues that Southern industries either supported the Federal government, or paid tribute to the Northern manufacturers, and that consequently the grievances of the Southern States were natural and just,–that their interests were sacrificed to national interests, as the New England interests had been sacrificed to the national interests at the time of the Embargo. Undoubtedly, the South had cause of complaint, and we cannot wonder at its irritation and opposition to the taxes imposed on all for the protection of American manufactures. On the other hand, it was a grave question whether the interests of the nation at large should be sacrificed to build up the interests of the South,–to say nothing of the great moral issues which underlie all material questions. In other words, in matters of national importance, which should rule? Should the majority yield to the minority, or the minority to the majority? In accordance with the democratic principles on which this government is founded, there is only one reply to the question: The majority must rule. This is the basal stone of all constitutional government, whose disruption would produce revolution and anarchy. It is a bitter and humiliating necessity which compels the intellect, the wealth, the rank, and the fashion of England to yield to the small majority in the House of Commons, in the matter of Irish Home Rule, but an Irishman's vote is as good as that of the son of an English peer. The rule of the majority is the price of political liberty, for which enlightened nations are willing to pay.

Henry Clay deserves great praise and glory for his persistent efforts at conciliation,–not only in matters pertaining to the tariff, but in the question of slavery to harmonize conflicting interests. But Calhoun–the greatest man whom the South has produced–would listen to no concessions, foreseeing that the slightest would endanger the institution with which the interests and pride of the Southern States were identified. At this crisis the country needed a man at the helm whose will was known to be inflexible.

In the session of 1830, on a question concerning the sales of public (U.S.) lands in the several States, arose the great debate between Colonel R.Y. Hayne, of South Carolina, and Daniel Webster on the limitations of Federal power; and Hayne's declaration of the right of a State to nullify a Federal law that was prejudicial to its interests gained him great applause throughout the South. John C. Calhoun, United States Senator from South Carolina, was at the head of the extreme State Sovereignty party, and at a banquet celebrating the birthday of Jefferson, January 13, 1830, he proffered the toast "The Union: next to Liberty, the most dear; may we all remember that it can only be preserved by respecting the rights of the States, and distributing equally the benefit and burden of the Union." Jackson, as President, and practical chief of the Democracy, was of course present at this political banquet. His profound patriotism and keen political instinct scented danger, and with his usual impulse to go well forward to meet an enemy, he gave, "The Federal Union: it must be preserved." This simple declaration was worth more than all the wordy messages and proclamations he ever issued; it not only served notice upon the seceders of his time that they had a great principle to deal with, but it echoed after him, and was the call to which the nation victoriously rallied in its supreme struggle with treason, thirty years later.

Notwithstanding the evident stand taken by the President, the Calhoun party continued their opposition on State lines to the Federal authority. And when Congress passed the tariff of July, 1832, the South Carolina legislature in the autumn called a convention, which pronounced that Act and the Tariff Act of 1828 unconstitutional,–"null and void, and no law;" called on the State legislature to pass laws to prevent the execution of the Federal revenue acts; and declared that any attempt at coercion on the part of the Federal authorities would be regarded as absolving South Carolina and all its people from all further obligation to retain their union with the other States, and that they should then forthwith proceed to organize a separate government, as a sovereign and independent State.

If such a man as Buchanan had then been in the presidential chair there probably would have been a Southern Confederacy; and in 1832 it might have been successful. But Jackson was a man of different mould. Democrat and Southern sympathizer as he was, he instantly took the most vigorous measures to suppress such a thing in the bud, before there was time to concert measures of disunion among the other Southern States. He sent General Scott to Charleston, with a body of troops stationed not far away. He ordered two war-vessels to the harbor of the misguided and rebellious city. On December 4 in his annual message he called the attention of Congress to the opposition to the revenue laws and intimated that he should enforce them. On December 11 he issued a proclamation to the inhabitants of South Carolina, written by Livingston, moderate in tone, in which it was set forth that the power of one State to annul a law of the United States was incompatible with the existence of the Union, and inconsistent with the spirit of the constitution. Governor Hayne issued a counter-proclamation, while Calhoun resigned the vice-presidency in order to represent South Carolina on the floor of the Senate. In January the President sent another message to Congress asking for authority to suppress rebellion.

Congress rallied around the Executive and a bill was passed providing for the enforcement of the collection of the customs at Charleston, and arming the President with extraordinary powers to see that the dangers were averted. Most of the States passed resolutions against Nullification, and there was general approval of the vigorous measures to be enforced if necessary. The Nullifiers, unprepared to resist the whole military power of the country, yielded, but with ill grace, to the threatened force. Henry Clay in February introduced a compromise tariff, and on the 27th of that month it was completed, together with an Enforcement Act. On March 3 it became a law, and on March 11 the South Carolina Nullifiers held an adjourned meeting of their convention and nullified their previous nullification. The triumph of Jackson was complete, and his popularity reached its apex.

It is not to be supposed that the collection of duties in Southern parts was the only cause of Nullification. The deeper cause was not at first avowed. It was the question of slavery, which is too large a topic to be discussed in this connection. It will be treated more fully in a subsequent lecture.

An important event took place during the administration of Jackson, which demands our notice, although it can in no way be traced to his influence; and this was the Anti-Masonic movement, ending in the formation of a new political party.

The beginning of this party was obscure enough. One Morgan in Western New York was abducted and murdered for revealing the alleged secrets of Freemasonry. These were in reality of small importance, but Morgan had mortally offended a great secret society of which he was a member, by bringing it into public contempt. His punishment was greater than his crime, which had been not against morality, but against a powerful body of men who never did any harm, but rather much good in the way of charities. The outrage aroused public indignation,–that a man should be murdered for making innocent revelations of mere ceremonies and pretensions of small moment; and as the Masons would make no apologies, and no efforts to bring the offenders to justice, it was inferred by the credulous public that Masons were not fit to be entrusted with political office. The outrage was seized upon by cunning politicians to make political capital. Jackson was a Mason. Hence the new party of Anti-Masons made war against him. As they had been his supporters, the Democratic party of the State of New York was divided.

The leading Democratic leaders had endeavored to suppress this schism; but it daily increased, founded on popular ignorance and prejudice, until it became formidable. In 1830, four years after the murder, the Anti-Masons had held conventions and framed a political platform of principles, the chief of which was hostility to all secret societies. The party, against all reason, rapidly spread through New York, Pennsylvania, and New England,–its stronghold being among the farmers of Vermont. Ambitious politicians soon perceived that a union with this party would favor their interests, and men of high position became its leaders. In 1831 the party was strong enough to assemble a convention in Baltimore to nominate candidates for the presidency, and William Wirt, the great Maryland lawyer, was nominated, not with any hope of election, but with the view of dividing the ranks of the Democratic party, and of strengthening the opposition headed by Clay,–the National Republican party, which in the next campaign absorbed all the old Federalist remnants, and became the Whig party.